Federal Government Prepares To Implement First Real Benefits From Health Reform

The federal government will unveil the first real benefits from the health care reform law this week, as states begin enrolling sicker individuals into health insurance policies and the federal government rolls out a new web portal designed to help Americans compare and purchase insurance products.

In at least 20 states, uninsured individuals with pre-existing conditions who have been without coverage for six months will be able to enroll in the new pools starting Thursday, but coverage will not begin until sometime in August. Under the new regulations, high-risk insurance pools will not be able to impose preexisting condition exclusions, will have to keep their premiums at “standard rates” (or no higher than the average person of that age would pay for insurance in the private market), limit on out-of-pocket medical costs to $5,950 a year for an individual, and maintain an actuarial value of at least 65%. Issuers will also be prohibited from varying premiums on the basis of age by a factor greater than 4 to 1.

According to Politico’s The Pulse, NASCHIP, a trade organization of high risk pools, is negotiating between the states and the federal government, pressing HHS for a “fair contract in terms of protecting states so that when they enter into this agreement, they’re not exposing themselves in terms of financial or legal liabilities,” and clarifying that states do not have “a financial commitment to run the pool if HHS funds run out.” The health care law gives states $5 billion establish the pools as an interim measure to provide coverage for Americans with pre-existing conditions until the exchanges become operational in 2014. Thirty states have announced that they will be administrating their own pools, but only 20 have submitted proposals to do so. The federal government will administer pools “through a private nonprofit entity” in the 19 states that have decided against implementing the measure.

On Thursday, HHS is also scheduled to unveil it’s new insurance portal, The new website that will allow individuals and small businesses to comparison shop between different coverage options, “including private insurance plans, high risk pools, CHIP and Medicaid.” Initially the site will only list the different insurance plans, but will eventually expand to include information about pricing and quality measures.